Food & Beverage

Colombia’s Alejandro Santo Domingo key to AB InBev proposal

John Paul Rathbone and Andres Schipani
Senior Managing Director at Quadrant Capital Advisors Inc. Alejandro Santo Domingo speaks at the 6th annual DKMS Linked Against Blood Cancer gala at Cipriani Wall Street on April 26, 2012 in New York City.
Theo Wargo | Getty Images

When society pages splashed in July that Alejandro Santo Domingo, a dashing South American billionaire, was to marry Lady Charlotte Wellesley, the Duke of Wellington's daughter, a small part died in the hearts of many of the fairest in the land, as the fairy tales might say.

Mr Santo Domingo, 38, is the handsome public face of his family's Colombian brewing fortune. A regular fixture in lists of the world's best-dressed and most eligible men, this week the Harvard-educated financier also emerged as kingmaker to Anheuser-Busch InBev's takeover bid for SABMiller.

For decades, the Santo Domingos were led by Alejandro's father, Julio, an urbane polyglot and astute dealmaker who built up a Colombian conglomerate that at its peak accounted for 4 per cent of national output.

His sale in 2005 of brewer Bavaria to SABMiller, a masterstroke, made the family SABMiller's second-largest shareholder, with a 14 per cent stake and two board seats. Today, having multiplied the family's wealth sevenfold to more than $14bn, that stake also makes the Santo Domingos the key to AB InBev's £65bn bid for the London-listed brewer.

M&A song and dance routine

Carlos Brito, Brazilian chief executive of the Budweiser brewer, acknowledged as much on Wednesday when he announced AB InBev's £42.15 per share offer. "There's no transaction without them, that's very clear."

Indeed, he said the cash-and-stock portion of his proposal was "designed with and for" the Santo Domingos, and he seemed to believe he had them on-board, so clinching the largest takeover of a UK-listed company.

Shortly afterwards though, Mr Brito had to rush out a statement: "To clarify that [AB InBev] does not currently have the support of [their] BevCo Ltd for the proposed combination."

Mr Santo Domingo, who manages the family's interests after his father's death in 2011 and was contacted by email about his family's intentions, said: "At the moment we have no comment."

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A debonair entrepreneur who lives in New York, Mr Santo Domingo in many ways seems to have a charmed life. He manages the family fortune out of Quadrant Capital Advisory, alongside his maternal cousin, Carlos Alejandro Pérez Dávila, 53, a former Goldman Sachs investment banker who sits with Alejandro on SAB's board.

In Colombia, the family are almost treated as royalty — indeed Alejandro's niece, Tatiana, is married into Monaco's royal family. Unusually among the children of the very rich — especially imposing fathers such as Julio, who associated with Colombia's political elite but also La Cueva, a bohemian literary group that included Gabriel García Márquez — social acquaintances remark on Alejandro's good nature, intelligence and philanthropic interests, such as pop star Shakira's educational charity.

"His father, Julio, was naughty. Alejandro is like Prince Charming, almost too much," exclaims one. "But he really is a nice guy, clever and kind, and takes great care of his mother, Doña Beatriz."

"He's very smart," adds Violy McCausland-Seve, an investment banker who once advised the family and employed Alejandro in 1999 as a promising financier out of college. "But intelligence also comes from knowing how to surround yourself with smart people, to listen … ask for opinions, and not think you know everything."

A "don", or talent, for business clearly runs in the family. The sale 10 years ago of Bavaria to SABMiller multiplied but also diversified the clan's fortune, so protecting it from the recent drop in emerging market asset prices.

It also allowed the Santo Domingos to clip some $1.5bn in dividends, reinvesting the proceeds in businesses ranging from logistics to media, such as El Espectador, which has a publishing agreement with the Financial Times and is Colombia's oldest newspaper. Such operations are grouped in Bogotá-listed private equity fund, Valorem, which has annual sales of over $1bn.

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However, its beer monopoly is the wellspring of the family fortune. Indeed, it was the success of the Santo Domingos, and other regional brewing dynasties like the Mendozas in Venezuela and Bembergs in Argentina, that inspired Brazilian billionaire Jorge Paulo Lemann, a key InBev shareholder, to get into the beer business and now launch the SABMiller bid.

"These guys [and their families] can't all be geniuses … It's the business that must be good," he once remarked.

So good, in fact, that the Santo Domingo family, who in 1996 rebuffed an offer from Mr Lemann for Bavaria, are unlikely to want to relinquish it easily.

The Santo Domingos "have always been interested more in shares than cash … and staying in brewing, the sector they know," said Ms McCausland-Seve. But "the world is full of mergers where [cultural] differences were so great … that in the end there was value destruction. So if you are Alejandro … you need to have a lot of assurance the deal … will give a lot of value."

What might turn the mind of Mr Santo Domingo, the "Prince Charming" who seemingly now has everything, including a bride? "Everyone wants to know what Alejandro thinks," says Ms McCausland-Seve, who says she does not know the family's thinking. "But the most important thing in M&A is to not say anything, do not talk, and keep the cards very close to your chest."